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Banks Aggressively Cut Interest Rates On Loan Products As Year End Approaches

Post by Sharat on December 28, 2017 · Under loans · Comments Off on Banks Aggressively Cut Interest Rates On Loan Products As Year End Approaches 

So the end of the holiday season is approaching and you want to either go away on holiday or finally finish renovating your kitchen. The good news is that recently many banks have cut interest rates on their personal loan products. As many as nine different banks made cuts to interest rates on car and personal loans last month. St. George paved the way with a huge 200 basis point cut on its fixed rate loan products.

Borrowers save money

Banks starting cutting their rates back in October. Most made cuts to car loan interest rates, the most recent cuts indicate the trend is continuing. Customers with large loans outstanding could well end up saving a lot of money. If you borrowed $30,000 for five years, a rate cut from 8.99% down to 6.99% would save you $1,722 in interest payments over the life of your loan.

Lots of banks getting in on the act

Rate cuts were not confined to the big banks, smaller lenders have also got in on the act. NRMA for example, has cut the rate it charges on its Fixed Car Loan product by 100 basis point. Borrowers purchasing a new car will pay a rate of 5.99%, whilst purchasers of used cars will pay 6.99%. Westpac made some changes as well, and has decided to waive the $250 application fee for its car loan product.

Financing end of year sales

It is not that big a surprise that lenders have been significantly reducing interest rates on car loans as we get to the end of the year. Most car dealerships make most of their sales during this period, so the banks have been competing for borrowers looking to make a purchase. Some banks have decided to cut interest rates on unsecured personal loans as they seek to attract borrowers looking to finance their Christmas spending or a holiday. Regardless of whether you are looking to buy a new car or simply need some extra cash to get through Christmas, make sure you shop around for the best deal on your loan.

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